PRIME MINISTER PERSSON: Mr. President. Mr. President. Welcome to the press conference, all members of the media. We have had a very productive summit between the European Union and the United States. We have been discussing, as you realize, matters that are on our common agenda. First of all, world trade, the necessity to go ahead with a new round to liberalize trade, to give a clear signal about the need to create growth in the world economy.

We realize the clear linkage between the last Uruguay Round and the consecutive years of good economic growth in the world economy. Now we are in a little bit more, if not stagnant phase, at least a phase with lower growth. We need a new impetus. We need a new stimulus to the economy. And the best thing to do is to go for a new round about how to liberalize trade.

We have discussed that; also some disputes and mechanism to solve disputes. This is the main message -- go along with the liberalization of trade to support and stimulate growth, the common responsibility for the European Union and the United States.

The second thing we have discussed was about how to find a way to cooperate about to combat climate change, because you know that's not a secret. We don't agree upon how we regard the Kyoto Protocol. So to say we agree to disagree about substance, according to the Kyoto Protocol. The European Union will stick to the Kyoto Protocol and go for a ratification process. The U.S. has chosen another policy.

But we have the same targets, and we have to meet the same problems. Climate change is not isolated to European, or to America, it's a global threat. So, nevertheless, if you are in favor or against the Kyoto Protocol, you have to take action. So we agreed to disagree about substance, but agreed to go on with some type of procedure that can lead us back to a position that we can cooperate and try to support each other.

We will call for personal representatives to follow up our discussion, and that we'll mean that we send a signal that we go on ahead with the Kyoto Protocol, the American government go on ahead with their policy, but we'll try to cooperate as much as possible and try to find a process for that.

That was the second thing we discussed. The third thing was about HIV/AIDS. There is a terrible threat for many millions, not least in Africa. A generation can be swept away, children without parents and children born with HIV. It's a tremendous threat, and something we just can't neglect. We have to take our part of the responsibility. The American President proposed a fund together with the U.N., and we discussed also how the European Union could support in that work. That was the third thing we discussed.

Then we also discussed, of course, the situation of the Balkans. We are close allies, we cooperate, and we said that we came in together and then the day come, we don't know when, we will go out together. That is important to say. And then, we'll do everything we can to support the governments around in the region, and to stay as constructive, reliable partners for the good progress according democracy and economy. It's not easy, but our presence is necessary.

We discussed, also, the situation in the Middle East. And we have a joint statement, the first time the European Union and the U.S., how to support the road back for peace and reconciliation. And that is to say that we urge the partners to live up to the cease-fire, because without an ending of violence, there will be no possibilities to go on with the so-called Mitchell Report that after the end of violence, we call for confidence-building measures, and then negotiations about peace and reconciliation. We stand together. We urge both partners to go for the cease-fire, and stick to it.

As you can hear, this is an agenda covering different subjects. But it's also, of course, a way to express our common values, how to cooperate about the economy; how to take responsibility for the conditions -- living conditions for the next generation; how to cooperate for peace and reconciliation around the world, based on values and based on the idea that Europe and the United States have to take a global responsibility in a global partnership. That is the main content during our U.S.-EU Summit today.

I give the floor to the President of the United States.

PRESIDENT BUSH: Mr. Prime Minister, thank you very much. Mr. President. I first want to start by thanking our Swedish hosts, particularly the King and the Prime Minister, for the generous hospitality shown to me and my wife and our delegation. Millions of Americans trace their heritage to Sweden, so it's a huge honor for me to be the first setting President of the United States to come to this country, to be with our friends.

We had great discussions over lunch and before lunch. I guess my summary is, is that friends are able to speak candidly and constructively. And our relationship with the United States -- between the United States and Sweden, and the United States and the European Union is strong and it is healthy. Values and the goals we share are durable, and they're great goals.

We resolve to work closely together, on issues that confront our nations. We share a strong interest in maintaining our economic ties. The EU and the United States have got the largest economic relationship in the world. Investment and annual trade come to approximately $1.5 trillion. And that's a relationship that is important to the working people of our respective countries.

Our trade relationship is strong. The recent resolution over the dispute on bananas proves that we can work to solve problems. And we'll continue to work closely with the EU in supporting a new round on global trade negotiations.

We share a commitment to building a Europe that is whole and free and at peace. We believe that we must continue to cooperate in Southeast Europe. As I told the Prime Minister, same thing I said yesterday at NATO, we went into Southeast Europe together, and we will leave together. That's a commitment of our government. We must also work to build institutions necessary, so that at some point in time, we can take our troops out of Southeast Europe. But until that happens, our government is committed to working with NATO and the EU to bring peace and democracy and stability to that part of the world.

The EU and the United States also understand we must be partners in confronting environmental challenges. The United States is committed to addressing climate change. We had a constructive discussion on this topic over lunch, and we agreed to create new channels of cooperation on this important topic. As the Prime Minister said, we don't agree on the Kyoto Treaty, but we do agree that climate change is a serious issue and we must work together. We agree that climate change requires a global response, and agree to intensify cooperation on science and on technology.

And finally, we share important challenges, as the Prime Minister mentioned -- fighting HIV/AIDS, malaria and tuberculosis in Africa; helping Africa lift itself out of poverty with trade and open markets; continuing efforts to ease tension and foster peace on the Korean Peninsula. We agree on the need for all parties to halt the violence in the Middle East.

These are great goals and we share common purposes, and it has been my honor to represent our great nation with the great nations of Europe in this fruitful and constructive dialogue.

Thank you, Mr. Prime Minister.

PRIME MINISTER PERSSON: Thank you.

President Prodi.

PRESIDENT PRODI: This first summit has shown how solid is our partnership. More than solid, it is indispensable for U.S., for Europe and for world peace. When we act together, we do enormous progress for peace. And we can -- we have taken a few issues this morning in which our cooperation has done very concrete results.

Trade, we can launch a new global trade round in Qatar if we work together. We have today committed ourselves to this goal. We agreed on a common approach for an inclusive WTO round, and we shall also address the specific interest of developing countries and their legitimate concern expressed by civil society.

Some may think that we work -- lose too much time working on trade disputes. But it is not true. Now the real disputes are very, very small now. And this morning we worked to make this even smaller. We have really stated today that we want to talk rather than to litigate. And we shall do --this will be our route. We have had the recent agreement on bananas and the gluten. And we are going on in trying agreements, even in the hottest spots of the province of trade.

Of course, for the climate change, I don't repeat the difference we have, but we have decided to work together on research. And I think this is a real goal because, for the future, we can approach our position.

Our objective and our duty remain the successful conclusion of the July conference in Bonn. And I was pleased to hear that the U.S. will participate in this conference. So the dialogue goes on, even if there are big difference in this.

So we agreed also on to stop the spread of disease, notably in Africa. And we are trying to convince to have an agreement in the pricing system to make good medicine affordable for the poorest people in the world. But on this subject we had the very interesting exchange of view and very interesting approach.

I don't repeat the work we have done together in the Balkans. The problems remain, but the European Union is assuming the leading role in this common challenge in the Balkans. And the cooperation in the Middle East has had results, and we have also started the idea of building up some foundation for economic cooperation in the Middle East, because if we don't work also in the economic fields, we shall never have a stable peace.

PRIME MINISTER PERSSON: Thank you, Romano. And you are --

Q President Bush, about a decade ago, your father came to Europe, around the time that the Soviet Union was breaking up, and he said he had a broad vision for Europe and its future and its expansion. In your five months in office, have you formed your own vision for Europe, and would you like to share that with us?

PRESIDENT BUSH: Tomorrow in Warsaw -- I'll be glad to give you a little preview. I believe that we have an opportunity to form an alliance of peace, that Europe ought to include nations beyond the current scope of EU and NATO. I strongly believe in NATO expansion, and I believe that the EU ought to expand, as well.

I believe a Europe, whole and free, is going to be a Europe that trades actively with the United States and with the rest of the world. Tomorrow, Friday -- I mean Saturday, I am going to be visiting with Mr. Putin. It's at a very important time for me to visit with Mr. Putin, to assure him a couple of things -- one, Russia is not the enemy of the United States; two, the Cold War is over and the mentality that used to grip our two nations during the Cold War must end; three, we look forward to working with Europe. Europe ought not to fear -- I mean, Russia ought not to fear a Europe -- Russia ought to welcome an expanded Europe on her border.

And so, my vision of Europe is a larger vision: more countries, more free trade, and one in which welcomes Russia and the Ukraine, welcomes Russia and encourages Russia to make the right choices when it comes to the institutions necessary to be able to become a partner with Europe and the United States.

Q A question for Mr. Bush, if I may. After the contacts you had and the talks you had today, are there areas where you would feel like deepening the cooperation with Europe? And, at the same time, are there also areas where you feel that you think so differently that this is no longer possible?

And the second question, if I may, on Kyoto. If research that you carry on together should show that there is a possibility of adding something to the Protocol, would you be interested in that, or is that a finished question? Thank you.

PRESIDENT BUSH: Well, I think a lot of people are surprised to hear that there is a spirit of cooperation on global warming and on climate change. I say loud and clear that our nation is willing to lead on this issue, that -- and I laid out the principles necessary for leadership: one, we must stabilize emissions; two, results must be measured, and we've got to spend money and time on additional science, which we're willing to do and willing to cooperate with the E.U. on; that we must be flexible in our solution. I think it's important to understand that things and information changes, and therefore, any solution that we agree to must be flexible. Four, that we believe that our economies can grow and at the same time, come up with climate change solutions; five, that we're willing to look at market-based solutions; and six, that the solution ought to be global. And so, to answer your question, there's a lot of ways for us to deepen discussions on this important issue.

I understand the concerns of people in Europe. The Prime Minister was most eloquent in his assessment and summary of the attitudes of people not only in Sweden, but in Europe. People in our nation care about global warming and greenhouse emissions, as well. We didn't feel like the Kyoto Treaty was well-balanced. It didn't include developing nations. The goals were not realistic. However, that doesn't mean we cannot continue to work together, and will work together, on reducing greenhouse gases.

I've laid out an energy plan that I shared with the Prime Minister and the President that not only addresses our nation's energy needs, because we're -- I've got an emphasis on conservation, as well as renewables and natural gas and nuclear power. The energy plan, if implemented, will help with the global climate.

Our nation is making progress; there's more to do, and we can work more with Europe. So there's an area right there that if someone would have said, well, they don't have much to talk about -- we've got a lot to talk about, and I look forward to the discussions.

Ron.

Q Thank you, sir. On the same topic --

PRESIDENT BUSH: There's other people up here, you know?

Q I actually have a question for two Presidents.

PRESIDENT BUSH: That's good. (Laughter.)

Q First to you. Not a single European Union nation has ratified the Kyoto Treaty, which was signed when many of your counterparts were in office. Yet, you've been criticized by these same leaders for rejecting it. Why do you suppose their actions have not been as forceful as the rhetoric? And, President Prodi, why haven't any EU nations ratified the treaty?

PRESIDENT BUSH: I don't have much more to add to the subject. I think that's a good question for President Prodi. I believe people are genuine about the issue. I don't believe there's any politics, necessarily. I think people are generally concerned, and are trying to address the issue as best as they possibly can. And -- but I would be interested in your answer.

PRESIDENT PRODI: There is no one single country who has declared not to ratify it. The ratification process will start soon, and it started already in some countries, it's going on, and there is no one message until now of refusal or delay of ratification.

Q Mr. President Bush, how do you really look upon a stronger, more united European Union, with the ambition of being the number one economy in the world? Do you see this as a threat to the U.S.? And will this lead to that U.S. will decrease its engagement in Europe in the future?

PRESIDENT BUSH: I appreciate good competition. I believe competition brings out the best in nations and people and entities. And our nation welcomes good, healthy competition. Secondly, I don't view European Union and its consolidation as a zero-sum game for the United States. I believe the stronger Europe is, the better it is off for America. The more peaceful Europe is, the better it is for America.

I am concerned about isolationism and protectionism, not only amongst some voices in Europe, but also in my own country. And I think that we've got to do everything we can to unite to promote free trade; not only free trade for the benefit of our own people, but free trade for the benefit of developing nations, as well.

We spent a lot of time talking about Africa, as we should. Africa is a nation that suffers from incredible disease, and it suffers from poverty, as well. And my way of thinking is the only way for Africa to grow and to develop, and to provide hope and opportunity for its citizens is for there to be trade between the United States and Africa, between the EU and Africa.

And so I view a strong EU as good for the world, and I welcome a strong -- my trip here was to send that signal as loud as I can that we will remain engaged with the EU and with NATO, that we respect the E. and NATO, and we understand it's importance to the future of our country.

Steve.

Q Mr. President, why did you decide to stop bombing exercises at Vieques Island? Were you swayed by the protests of the Puerto Rican people, or were there political factors involved, such as the concerns of Puerto Rican -- excuse me, Hispanic Americans?

PRESIDENT BUSH: He's referring to the fact that upon assuming office, I was presented, like I have been on other issues, with an agreement between Puerto Rico and the United States government that we would conduct exercises off of the island of Vieques for the United States Navy. My attitude is that the Navy ought to find somewhere else to conduct its exercises -- for a lot of reasons. One, there's been some harm done to people in the past. Secondly, these are our friends and neighbors, and they don't want us there.

And so I appreciate the fact that the Defense Department and the Navy responded and have made the statement loud and clear that, within a reasonable period of time, that the Navy will find another place to practice, and to be prepared to keep the peace. It's the right agreement. I applaud the Defense Department and the Navy for reaching that agreement.

Q Mr. President, my question is on the Middle East. Mr. Bush, do you see Europe and the United States as equal and -- fully equal partners and mediators in the Middle East conflict?

PRESIDENT BUSH: I see Europe and the United States with the need to speak with one voice, and one voice only, and that is implement Mitchell, starting with breaking the cycle of violence. The EU has had some constructive meetings in the Middle East and we appreciate their efforts. The Prime Minister went to the Middle East. He shared with us his concerns and what he saw. But what we must do as friends and allies is say only one thing, and work toward only one goal right now, and that is to stop the cycle of violence. There should be no -- understand, there should be no -- political dialogue isn't going to happen until the violence stops.

And all parties have got to understand that if there's a genuine desire for a more peaceful situation, the ability to discuss a wide range of issues, that they've got to break the cycle of violence. And we're committed to working together to do just that. We're committed to spending our capital and energies.

The Middle East is consuming a lot of time in my administration, as it should. It's a very important part of the world. I'm pleased to report yesterday in Brussels that the Tenet initiative was able to at least get signatures on a piece of paper. But signatures are just that until there's action. And there must be action. And that's the message that the EU leaders and my country are going to send to the parties involved.